The Top 10 SaaS Metrics of 2022, in the Order Investors Ask
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Every founder on the show gets asked the same questions, because the same ten numbers decide whether a SaaS company is working. This is the 2022 edition of that list — what each metric means, the formula, and the trap each one hides. Ten numbers, in the order an investor actually asks for them.
- Revenue first — MRR, ARR, and growth establish size and speed.
- Retention second — net retention and churn reveal whether the base compounds or leaks.
- Efficiency last — CAC, payback, LTV and their ratio show what the growth costs.
1. Monthly Recurring Revenue (MRR)
The subscription revenue you can count on this month — the heartbeat metric. Everything else on this list is computed from it or against it. One-time services, setup fees and overages stay out. Full treatment: what counts as MRR and what doesn’t.
2. Annual Recurring Revenue (ARR)
ARR = MRR × 12Honest only when this month’s MRR is representative — annualizing a spike is the oldest trick in the pitch deck. See run rate vs. reality.
3. Revenue growth rate
Year over year, on recurring revenue. Quarter-over-quarter annualized flatters seasonality; month-over-month flatters everything. Investors in 2022 still price growth above all — but only growth that survives the retention section below.
4. Net Revenue Retention (NRR)
Take a cohort of customers from a year ago: what’s their revenue worth today, expansions minus downgrades minus churn, ignoring new logos? Above 100% means the business grows even with sales asleep. The best companies on the show — think mParticle’s 150% — are built on pricing meters that expand with the customer.
5. Gross revenue churn
Gross churn = revenue lost from a cohort ÷ cohort’s starting revenueBefore adding back expansion — that’s the “net” in NRR. The gross number is the honest ceiling on how leaky the bucket is.
Report both. A 120% NRR built on 10% gross churn and one built on 25% gross churn are different companies. The full gross-vs-net breakdown: revenue churn.
6. Customer Acquisition Cost (CAC)
Fully loaded sales and marketing spend — salaries included — divided by new customers landed. The number founders most often quote un-loaded. What founders actually disclose, by sales motion.
7. CAC payback period
Payback (months) = CAC ÷ monthly gross profit per customerUnder 12 months is self-funding; 18–24 is venture-dependent; beyond 24, churn decides your fate before the customer pays you back.
8. Customer Lifetime Value (LTV)
What a customer is worth before churn takes them — gross-margin-adjusted, not revenue. Computed honestly, it’s the denominator’s job: average lifetime comes from churn, so bad churn data makes LTV fiction. Full math: CLTV.
9. LTV:CAC ratio
The efficiency verdict: 3:1 is the textbook floor, 5:1 suggests underinvestment in growth, 1:1 is a going-out-of-business sale. The ratio is only as honest as its two inputs — which is why it comes ninth, not first.
10. Rule of 40
Growth rate plus profit margin, summed. The one-number screen for whether growth is bought or earned — how to compute it without flattering yourself.
The thread through all ten: each metric exists to keep the one before it honest. ARR without churn is a vanity number; growth without CAC is a spending report; LTV without gross margin is a wish. Investors read them as a system — founders should too.
For the working library — every metric with founder-disclosed benchmarks — start at the SaaS metrics hub.
SourcesMetric definitions as used across Nathan’s founder interviews; founder-stated examples from the GetLatka archive through early 2022.